EU pressure for chip self-sufficiency remains positive for Malaysian gamers: MIDF Research
PETALING JAYA: The European Union’s (EU) plan to be self-sufficient in semiconductors amid a global materials shortage comes as no surprise to MIDF Research director Imran Yassin, who believes the development of a European chip manufacturing ecosystem will always have a positive impact. on Malaysian players due to fragmentation in the downstream niches of the industry value chain.
“For example, outsourced semiconductor assembly and testing (OSAT) players typically serve semiconductor manufacturers. Downstream, these actors serve the manufacturers of subsystems or final equipment, for example level 1 car manufacturers or cell phone manufacturers.
Therefore, there is still plenty of room for Malaysian players, ”Imran told SunBiz.
To illustrate the situation, he pointed out that MIDF’s first choice among OSAT players, Inari Amerton Bhd, will always remain a proxy for the growth of 5G technology through its radio frequency business segment which contributes nearly 70% of the turnover. group business.
“Its 5G positioning firmly positions the company to continue to be the primary beneficiary of the 5G technology trend and strong smartphone sales,” said Imran.
On Friday, Inari closed 10 sen or 2.82% up to RM 3.64 per share.
Last Wednesday, European Commission President Ursula von der Leyen revealed that the region will introduce the European Chips Act, aimed at developing a European chip ecosystem, including production. She was quoted by Bloomberg as saying the policy “will ensure our security of supply and will develop new markets for revolutionary European technology.”
Likewise, EU Industry Commissioner Thierry Breton wrote in a blog post that chips are more than just key components for automakers, smartphone makers and video gamers. “The race for the most advanced fleas is a race for technological and industrial leadership. “
He said the law will cover research, production capacity and international cooperation, and will consider the creation of a European fund dedicated to semiconductors.
In June of last year, the United States launched a similar policy by introducing the CHIPS for America Act, which will devote billions of dollars in incentives and research initiatives over the next five to ten years to the semiconductor manufacturing, a sector deemed crucial to the country’s economic and national security.
Globally, global semiconductor trade statistics forecast that the semiconductor market will grow 25.1% to reach US $ 551 billion in 2021 (RM2.29 trillion), exceeding the 6.8% growth recorded the previous year.
Faced with these figures, the head of MIDF Research believes that the supply of chips will gradually meet demand, as the industry remains on track to deliver another year of strong growth.
Based on the Gartner Index of Inventory Semiconductor Supply Chain Tracking, Imran pointed out that chip supply will gradually improve and head to an area of moderate scarcity by the fourth quarter of this year before returning to the area. normal supply by the second quarter of 2022.
“This high demand is understandable because we believe that the semiconductor industry is not only the cornerstone of all modern technologies, but that advancements in emerging technologies such as autonomous driving, artificial intelligence, 5G and the Internet of Things are pushing the industry to continue its robust growth over the next decade, ”he said.